Wednesday, April 26, 2017

Interview: Christopher Whalen explains how 'flyover America' pushed Donald Trump over the top

This is the second part of my discussion with Christopher Whalen. The first piece is available.

Story by Joseph Ford Cotto

As always, there is a lot going on in Washington, DC nowadays. No small measure of it relates to money, but not necessarily campaign spending.

How Donald Trump and, to a lesser extent, his administrative personnel -- along with Republicans on Capitol Hill -- handle the economy will make or break this presidency's legacy. Trump promised a great deal to his supporters, and managed to unilaterally see through some of his pledges, but found congressional-slash-judicial opposition toward others.

Most intriguing is that Trump tied the seemingly non-fiscal matter of immigration to his economic platform. Foreign trade, while more relevant to national wages than border patrol hirings, has traditionally been in the realm of international policy. Trump broke from precedent by tying it to the average American's quality of life.

Politics have not been the same since, and it seems unlikely that they will revert to business-as-usual anytime in the foreseeable future. Christopher Whalen is a longtime observer of -- and participant in -- fiscal happenings.

His publicity biography describes him as "the ultimate Wall Street insider who understands the intersection of politics and finance, and is known for telling his readers the truth. He has worked in politics, at the Federal Reserve Bank of New York and as an investment banker for more than 30 years. Considered one of the most incisive and thoughtful financial analysts on Wall Street, Christopher coverers a wide range of subjects from banking to housing to global economics and the Federal Reserve. He is the author of three books Inflated (2010), Financial Stability (2014) and Ford Men (2017). Christopher publishes the blog “Washington & Wall Street” and contributes to many other publications and appears in media outlets including CNBC, Bloomberg and The Wall Street Journal."

Whalen recently wrote Ford Men, which strives to tell the full story of how Henry Ford's family built the automotive empire we have all come to love (or hate). Whalen chatted with me about Trumponomics and Ford Men. Some of our discussion is included below.

****

Joseph Ford Cotto:'Flyover America' is often used to describe the majority of this country; specifically that which is outside of major cities and their suburbs. How did the prevailing fiscal sentiment here allow Trump to overcome huge Democratic margins in urban, as well as some suburban, areas?

Christopher Whalen: Two issues. First, the black, minority vote did not seem to come out for Hillary. Second, Trump managed to convert a lot of traditional blue collar Democrats in blue states. And still the face was extremely close.

Cotto: In politics, there is a familiar showdown between Wall Street and Main Street. In the long term, did Trump's victory prove a turning point for either one of these?

Whalen: Main Street thought that it won with Trump in 2016, but in fact Wall Street won before the contest began. The Trump Administration is overrun by bankers from Goldman Sachs, a sure sign that CEO Lloyd Blankfein is expecting economic trouble. When this many Goldman folks feel the desire for public service, you know that the mother ship is expecting market issues.

Cotto: Among the Republican voting public, how did prevailing economic trends contribute to Trump's nomination?

Whalen: Economic malaise and uncertainty in the public mind feeds Trump’s base. The collective issue of immigration and political turmoil (BREXIT) causes economic uncertainty.